Tds on shoot of advertisment

TDS will be requried to be made u/s 194C as the payment exceed Rs. 30,000.  As per explanation given to the said section, the term work also includes advertising.  Hence if the paym etn is being made to an individual then TDS @ 1% should be made & if it is being made to a person other than individual or HUF then TDS @ 2% should be made.

the relevant extract of section 194C is given below:

¹⁵194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor¹⁶) for carrying out any work¹⁶ (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to—

               (i)   one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;

             (ii)   two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family,

of such sum as income-tax on income comprised therein.

Explanation.—For the purposes of this section,—

               (i)   “specified person” shall mean,—

        (a)   the Central Government or any State Government; or

        (b)   any local authority; or

        (c)   any corporation established by or under a Central, State or Provincial Act; or

        (d)   any company; or

        (e)   any co-operative society; or

         (f)   any authority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or

        (g)   any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or

        (h)   any trust; or

         (i)   any university established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or

         (j)   any Government of a foreign State or a foreign enterprise or any association or body established outside India; or

        (k)   any firm; or

         (l)   any person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, if such person,—

        (A)   does not fall under any of the preceding sub-clauses; and

       (B)   is liable to audit of accounts under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor;

             (ii)   “goods carriage” shall have the meaning assigned to it in the Explanation to sub-section (7) of section 44AE;

            (iii)   “contract” shall include sub-contract;

            (iv)   “work” shall include—

        (a)   advertising;

        (b)   broadcasting and telecasting including production of programmes for such broadcasting or telecasting;

        (c)   carriage of goods or passengers by any mode of transport other than by railways;

        (d)   catering;

        (e)   manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer,

                      but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer.]

Mr.Giridhar S. Karandikar,

Being a Senior Analyst do you think the provisions of Section 194C will apply for the services/work as explained by Mr.Abhinav?

I am afraid Mr.Abhinav is asking for some more clarification other than the one given by you Mr.Giridhar S.Karandimar.

Best Wishes

Sathikonda

Mr sathikonda,  could you please explain why the provision of 194C would not apply???

Yeah mr. Gridhar, Pls read my query and then reply accordingly.

I appreciate your revert but I beleive that was not the solution of my querry

mr.  Gridhar, i think section 195 will be applicable here as this is the payment to non resident.

Mr Abhinav, I have given my explanation according to the provison of section 195y.  The sub-section (1) of the said section reads as follows:

195. ⁷²[(1) ⁷³Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest ⁷⁴[***] or any other sum chargeable under the provisions of this Act (not being income chargeable under the head “Salaries” ⁷⁵[***]) shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force :

The sections states that 'Any such sums chargeable under the provision of this Act'  TDS is required to be made at the rates in force:

so I think that the deduction as stated u/s 194C should be made at the rates specified in the section.

Dear Mr. Giridhar, said payment is to be made to non resident in Dubai, UAE. Pls advise if rates will be applicable as per DTAA.

TDS will not applicable in this case but With hold Tax applicable rate priscribed by Chartered Accountant in Form 15CB

i think WHT is 20%

Withholding Tax is attracted. This is Remittance to a Non - Resident attracting Sec 195.

Hence, deduct tax as per 'rates in force' in Sec 195 or rate specified in DTAA with Dubai, UAE, whichever is beneficial to the assessee.

Regards

Prateek

AS PER 195 RATE IS 2% BUT AS PER DTAA WITH UAE RATE IS NIL.

IN MY OPINION IT IS A ADVERTISEMENT CONTRACT...

SO THAT TDS IS TO BE DEDUCTED U/S 194 C..... 1% OR 2% DEPEND ON DEDUCTEE...

IF CO,FIRM THEN 2 % OTHER CASE 1%...